I know the Depreciation entries for 2015 on the accumulated depreciation and retained earnings are supposed to be (20,300), and 20,300 and the net

I know the Depreciation entries for 2015 on the accumulated depreciation and retained earnings are supposed to be (20,300), and 20,300 and the net income should be (1,100) but I have no idea how to solve and am having so much trouble. Can you please tell me how to solve them?

Depreciation and Error Analysis A depreciation schedule for semi-trucks of Ichiro Manufacturing Company was requested by your auditor soon after December 31, 2011, showing the additions, retirements, depreciation, and other data affecting the income of the company in the 4-year period 2008 to 2011, inclusive. The following data were ascertained.

Balance of Semi-trucks account, Jan. 1, 2008

Truck No. 1 purchased Jan. 1, 2005, cost $18,000

Truck No. 2 purchased July 1, 2005, cost 22,000

Truck No. 3 purchased Jan. 1, 2007, cost 30,000

Truck No. 4 purchased July 1, 2007, cost 24,000

Balance, Jan. 1, 2008 $94,000

The Semi-trucks—Accumulated Depreciation account previously adjusted to January 1, 2008, and entered in the ledger, had a balance on that date of $30,200 (depreciation on the four trucks from the respective dates of purchase, based on a 5-year life, no salvage value). No charges had been made against the account before January 1, 2008. Transactions between January 1, 2008, and December 31, 2011, which were recorded in the ledger, are as follows.

July 1, 2008 Truck No. 3 was traded for a larger one (No. 5), the agreed purchase price of which was $40,000. Ichiro Mfg. Co. paid the automobile dealer $22,000 cash on the transaction. The entry was a debit to Semi-trucks and a credit to Cash, $22,000. The transaction has commercial substance.

Jan. 1, 2009 Truck No. 1 was sold for $3,500 cash; entry debited Cash and credited Semi-trucks, $3,500.

July 1, 2010 A new truck (No. 6) was acquired for $42,000 cash and was charged at that amount to the Semi-trucks account. (Assume truck No. 2 was not retired.)

July 1, 2010 Truck No. 4 was damaged in a wreck to such an extent that it was sold as junk for $700 cash. Ichiro Mfg. Co. received $2,500 from the insurance company. The entry made by the bookkeeper was a debit to Cash, $3,200, and credits to Miscellaneous Income, $700, and Semi-trucks, $2,500. Entries for depreciation had been made at the close of each year as follows: 2008, $21,000; 2009, $22,500; 2010, $25,050; 2011, $30,400.

(a) For each of the 4 years compute separately the increase or decrease in net income arising from the company’s errors in determining or entering depreciation or in recording transactions affecting trucks, ignoring income tax considerations.

(b) Prepare one compound journal entry as of December 31, 2011, for adjustment of the Semi-trucks account to reflect the correct balances as revealed by your schedule, assuming that the books have not been closed for 2011.

Calculate Your Essay Price
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
The price is based on these factors:
Academic level
Number of pages
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more

Order your essay today and save 10% with the coupon code: best10